Investors eagerly await the Arm IPO set for later this year, given that Arm is regarded as a crowning jewel in SoftBank’s Vision Fund. The Vision Fund wholly owns the company after the latest transaction, where the fund bought the remaining 25% of the company that it did not own at a market valuation of $64 billion.
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The question remains, is Arm worth the $64 billion valuation or more like SoftBank CEO Masayoshi Son claims? The short answer is that we won’t know for sure until after the IPO, as the markets will then decide how much the company is worth as a public company.
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SoftBank is expected to file for its IPO later today, with most investors looking forward to reading the prospectus to get details on how the company will operate once listed. Investors are looking for clues about how Masayoshi Son intends to position the company within the highly-competitive AI space.
Masayoshi told investors in June this year that Arm “is at the centre of a group of AI-related companies to generate synergies” and “85% of SoftBank Group assets are AI-related companies overseas.”
The billionaire investor also said he had spent months creating hundreds of inventions with AI-powered ChatGPT that he believes could be realised through Arm. Son has talked extensively about the critical role that Arm could play in advancing AI but has yet to provide any details.
Investors hope that today’s filing will shed light on how Arm plans to achieve the ambitious goals touted by the billionaire investor.
Analysts and investors familiar with Masayoshi Son take his words with a pinch of salt after he hyped up the role that the Internet of Things (IoT) would play in the company’s future upon acquiring it in 2016. His prediction was wrong, as IoT contributes a tiny portion of Arm’s revenues.
Some analysts, such as Kirk Boodry of Astris Advisory Japan, have pointed out that the most significant hype about AI was on the software and the platform side, and “that's not what Arm is; it's not in any way related to that.”
Nvidia has benefitted the most from the AI boom as its advanced semiconductors power the data centres behind large language models such as ChatGPT. Arm could benefit from Nvidia’s success since Nvidia's chips must be coupled with energy-efficient central processing units (CPUs) – Arm's specialty.
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